Friday, November 30, 2012

What do you whiners think about Tim Geithner now?

From the moment President Obama nominated Tim Geithner as Treasury Secretary, the whiners on the left have been screaming bloody murder. Any time you tried to engage them in talking about the President's proposals and/or accomplishments, they thought that all they had to do was throw out his name and that was proof that Obama was a "sell-out" to the plutocracy.

Well I have to wonder what those folks are thinking about Tim Geithner now. Apparently he was the one chosen by the President to take his budget proposal to the Republicans in Congress. Here's what we know about what was included:

End the Bush tax cuts for income over $250,000

Raise tax rates on dividends and capital gains

Reform the tax code to raise an additional $600 million in revenue

Reform the alternative minimum tax

Extend small business tax breaks

Return the estate tax to 2009 levels

Unspecified cuts to non-entitlement mandatory spending

$25 billion in additional stimulus spending over the next 6 years (basically funding the unpassed portions of the American Jobs Act)

Expand funding for unemployment insurance

Extend the payroll tax for one year

A government mortgage re-financing plan

An end to Congressional approval of debt ceiling increases

Most people are noting that this is a strong progressive move on the part of President Obama. I'd just like to add that the messenger for this strong progressive move is someone who has been mercilessly vilified as the most influential corporate tool in the White House. Wanna re-think that one?

I'm not really interested in his "lifetime" record - I'm interested in evaluating what he's done since he got the job as Treasury Secretary. As far as I can see, he's proposed effective liberal policy based in good economic and political reality.

My impression was always that Geithner was a company man. He worked for someone else. When Obama gave him the job, he worked for Obama. My sense was that Obama wanted people who had worked in the financial industry on his team. He did not want people working behind his back to undermine him, and I get no sense that either Geithner or Summers did.

You could disagree with the fiscal proposals of the first term, but it's totally insulting to Obama to suggest that they weren't HIS proposals but rather that he was a dupe who got dazzled by Summers and Geithner.

Obama's project is to shift the sense of "normal" leftward. A good showing in the last election is evidence of that shift, and we are seeing the results of that with this proposal.

Obama is cautious. Partially that's personal, partially that's the price any person of color has to pay in our system. At the same time, I think it's totally naive to imagine that Obama's choice to be cautious in the first term was simply a personal matter.

People do not always seem to understand how thorough this country's shift to the right was from Nixon forward, and how bad it got under Bush. I know all too well that the only real cure for a hangover is time.

Nobody suggested that Geithner was a genius. On the contrary, if anything, and that's from me and SP both.

"strong progressive move on the part of President Obama"

I think the point was that a large part of the left dismissed Obama, using much the same thinking as the right, as "out of his league" surrounded by these vipers from the financial industry, like Geithner, who made him their tool. Given this proposal, we have more clear trajectory, first term to second, that indicates that Obama had plans for a second term that involved pushing things leftward.

I think the point was that we ought to be somewhat relieved that these policies are being put forward now, and that it indicates that there was a rush to judgement on many people's parts in the first term.

So, to be clear with my take, Geithner's instincts are not my instincts. He seemed to me to be on the left-wing of the kind of people who actually got Fed Reserve jobs in the last 30 years. Meaning, not on the left, but moderately right. If you wanted anyone with economic expertise who was left, you had to go to academia or maybe World Bank (i.e., Steiglitz), and I think Obama wanted people from within the industry. Geithner was one he could work with. He was "one of us" to the finance crowd, but open to the idea of Keynesian stimulus (because it actually is good economics rather than just ideology). Not my favorite player, but on the team.

I've been trying to watch him for the last 4 years since he was such a lightning rod to many on the left. I suspect that he was really shaken by the events of 2008 - specifically the collapse of Lehman Brothers. I think too many people read that as support of the financial industry. But its just as plausible that he knew what a complete collapse would do to the entire world economy. Folks in the financial industry would have weathered that storm a whole lot better than everyday folks - and he knew that.

I once tried to track down a speech of his I heard referenced where he talked about growing income inequality as the number one financial issue of our times - and specifically its affects on the poor. I saw the reference but could never find a transcript of what he actually said.

These are the kinds of things that make me question the characterization of him that is so prevalent.

I think you're probably right about how he felt about Lehman Bros. That was a sign that things weren't OK, and some people in finance got it. He seems like he is someone who wants to deal with reality. Income inequality, too. From a reality standpoint, it's a huge problem not just for working people, but for capitalists as a class. Buffet knows this. He is no socialist.

So yes, Geithner is a good example of how what I might see as "the other side" actually has a lot of people on it with whom I could work. He's not going to support a 90% rate on the top bracket, or support a real right to work and housing, or free education through Ph.D., or whatever I might want. But we can get behind diminishing income inequality and form a coalition.

This offer reflects the priorities of the president (and the party in general) and says next to nothing about Geithner's tenure as Treasury Secretary. Are you suggesting it would be any different than if Jack Lew or Gene Sperling or Obama himself were acting as the chief negotiator?

I don't disagree with you at all. I guess the point for me (the bee in my bonnet) is that Obama is in charge, and that all the talk that he was some patsy taken advantage of by Wall St. was wrong at best, racist at worst.

There is nothing that suggests that Geithner is acting any differently than a replacement level generic Democratic chief negotiator. This is a good thing, but it is also no reason to reevaluate the past decisions he made as Treasury Secretary, some of which were likely worse than what would have happened under a generic Democratic alternative.